BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 502


                                                                    Page  1





          Date of Hearing:  June 22, 2015


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                Anthony Rendon, Chair


          SB  
          502 (Leno) - As Amended April 8, 2015


          SENATE VOTE:  37-0


          SUBJECT:  San Francisco Bay Area Rapid Transit District:   
          purchase and delivery of electricity.


          SUMMARY:  This bill authorizes the San Francisco Bay Area Rapid  
          Transit District (BART) to purchase electricity generated by a  
          renewable energy resource as defined in California's Renewable  
          Portfolio Standards (RPS) Program.  Specifically, this bill:  


          a)Requires an electrical corporation that owns and operates  
            transmission and distribution facilities that deliver  
            electricity at one or more locations to BART, upon request by  
            BART, and without discrimination or delay, use the facilities  
            to deliver electricity generated by an eligible renewable  
            energy resource.


          b)Defines "eligible renewable energy resources" to mean  
            renewable energy resources eligible under California's RPS  
            program. 










                                                                     SB 502


                                                                    Page  2





          EXISTING LAW:   


          1)Requires any electrical corporation that owns and operates  
            transmission and distribution facilities that deliver  
            electricity at one or more locations to BART, upon request by  
            BART, and without discrimination or delay, use the same  
            facilities to deliver preference power purchased from a  
            federal power marketing agency or its successor, or deliver  
            electricity purchased from a local publicly owned electric  
            utility (POU).  (Public Utilities Code Section 701.8)


          2)Requires the electric utility to bill BART for usage as though  
            all the electricity purchased at transmission level voltages  
            were metered by a single meter at one location and all the  
            electricity purchased at subtransmission voltages were metered  
            by a single meter at one location, as specified.  (Public  
            Utilities Code Section 701.8)


          3)Prohibits an electrical corporation from terminating any lease  
            entered into between BART and an electrical utility for  
            special facilities for the purpose of receiving power at  
            transmission level voltages to be terminated without the  
            consent of BART.  (Public Utilities Code Section 701.8)


          4)Establishes the RPS program, which expresses the intent of the  
            Legislature that the amount of electricity generated per year  
            from eligible renewable energy resources be increased to an  
            amount that equals at least 33% of the total electricity sold  
            to retail customers in California per year by December 31,  
            2020.  (Public Utilities Code Section 399.11)


          5)Directs the State Air Resources Board to monitor and regulate  
            sources of emission of greenhouse gases that cause global  
            warming in order to reduce emissions of greenhouse gases.   








                                                                     SB 502


                                                                    Page  3





            (Health and Safety Code Section 38510)


          FISCAL EFFECT:  Unknown.


          COMMENTS:  


           1)Author's Statement:   "BART trains are 100% electric, fueled by  
            a power mix with a high percentage of clean hydropower.  Each  
            weekday, BART riders prevent over 4.5 million pounds of  
            polluting CO2 from entering the atmosphere.  The elected  
            members of the BART Board of Directors would like the ability  
            to procure more renewable energy by contracting directly with  
            RPS eligible renewable electric generation resources.  Under  
            current law, those procurements would have to be done through  
            third party transactions managed by one of the sources of  
            electricity authorized for BART in state law.  This  
            constitutes an unnecessary barrier that the BART District  
            seeks to eliminate."


           2)Background:   California's RPS was established in 2002 under SB  
            1078 (Sher, Chapter 516, Statues of 2002), and was accelerated  
            in 2006 under SB 107 (Simitian, Chapter 464, Statutes of 2006)  
            to require that 20% of electricity retail sales be served by  
            renewable energy resources by 2010.  The RPS was again  
            increased in 2011, through SBX1-2 (Simitian, Chapter 1,  
            Statues of 2011), to require that 33% of electricity retail  
            sales be served by renewable energy resources by 2020.  





            Furthermore, in 2006, the Legislature enacted AB 32 (Nunez,  
            Chapter 488, Statutes of 2006), which tasked the Air Resources  
            Board to adopt rules and regulations that would reduce  








                                                                     SB 502


                                                                    Page  4





            greenhouse gas emissions in the state to 1990 levels by 2020.   
            The RPS and AB 32 represent active steps taken by the state to  
            reduce the adverse impact and threat global warming poses to  
            the economic wellbeing, public health, natural resources, and  
            environment of California. 


            In January 2015, Governor Brown proposed in his inaugural  
            address three ambitious goals to be accomplished within the  
            next 15 years.  These goals are:





                     Increase from 33% to 50% our electricity derived  
                 from renewable sources;



                     Reduce today's petroleum use in cars and trucks by  
                 up to 50%; and



                     Double the efficiency of existing buildings and make  
                 heating fuels cleaner.



           1)BART:   BART is a regional rapid transit system built in 1972  
            that services communities in the Bay Area, including Alameda,  
            Contra Costa, San Francisco, and San Mateo Counties, with  
            plans to expand to Santa Clara County.  The BART system has 44  
            stations and 104 miles of track with an estimated average  
            weekday ridership of 403,680 and 122 million trips annually.   
            BART trains are 100% electric with 53% of its power coming  
            from clean hydro and renewable sources.  In addition, the  
            Federal Transportation Agency considers BART the cleanest  








                                                                     SB 502


                                                                    Page  5





            transit system in the United States.    


          2)Procurement of Energy:   Until 1995, BART procured its energy  
            from its regional investor owned utility (IOU), Pacific Gas &  
            Electric Company (PG&E).  In 1995, the Legislature passed SB  
            184 (Kopp, Chapter 681, Statues of 1995), allowing BART to  
            procure energy from a federal power marketing agency or its  
            successor.  In 2004, the Legislature passed SB 1201  
            (Torlakson, Chapter 613, Statutes of 2004), allowing BART to  
            also procure energy from a POU.  These measures allowed BART  
            to access inexpensive federal hydropower.  As a result, BART  
            currently procures its electricity from the Northern  
            California Power Agency, a local POU, and the Western Area  
            Power Administration, a federal agency.  BART also generates  
            electricity from solar facilities located at BART facilities.   
            BART was given the authority to procure electricity through a  
            municipal utility, subject to fulfilling transmission and  
            distribution cost responsibilities.  Other transit systems  
            seeking to procure power from a source other than their  
            regional electricity provider would be required to do so  
            through existing "direct access" programs.  Direct access is  
            not available in areas served by POUs.  


             This bill would authorize BART to procure eligible renewable  
            resources defined under the RPS.  Although BART is the  
            cleanest transit system in the US, its Board of Directors  
            further seeks to reduce the system's carbon emissions by  
            seeking to procure more energy from renewable resources.   
            Currently, if BART wishes to procure renewable energy, it can  
            only do so through a federal power marketing authority or a  
            local POU.  Allowing BART to directly procure electricity from  
            an eligible renewable energy resource would remove this  
            barrier and allow it to directly contract with eligible  
            renewable resources.


            BART compensates PG&E for the use of the utility's  








                                                                     SB 502


                                                                    Page  6





            transmission and distribution system. As a result, other  
            customers of PG&E are not impacted by transactions proposed by  
            this bill.


           3)Arguments in Support:   According to BART, the sponsor of the  
            bill, "BART is the backbone of the Bay Area transit system,  
            providing more than 400,000 daily passenger trips throughout  
            Alameda, Contra Costa, San Francisco, and San Mateo Counties.   
            BART's all-electric trains provide reliable and efficient  
            transit service - a critical alternative to driving - that  
            reduces the Bay Area's carbon footprint by nearly 4.5 million  
            pounds of CO2 a day.  SB 502 will authorize BART to procure  
            electricity from generation facilities that qualify as  
            renewable under the [RPS], and will go a long way into  
            assisting the BART Board in its effort to procure more  
            renewable energy and further reduce the local carbon foot." 


              4)   Related Legislation:


             AB 197 (E. Garcia) 2015:  This bill revises the RPS  
            procurement process to emphasize greenhouse gas emissions and  
            reliability factors.  


            AB 645 (Williams) 2015:  This bill establishes a RPS target of  
            50% by 2030, including interim targets of 38% by 2023, and 44%  
            by 2026.


            SB 286 (Hertzberg) would expand the limit on Direct Access  
            (DA) service for nonresidential customers of electrical IOUs.


            SB 350 (De Leon) 2015:  This bill enacts goals that would  
            direct a 50% reduction in petroleum use, require that 50% of  
            electricity come from renewable resources, and require a  








                                                                     SB 502


                                                                    Page  7





            doubling of the energy efficiency of existing buildings by  
            2030. 


           5)Prior Legislation:


             SBX1-2 (Simitian) 2011:  Increases California's RPS to require  
            all retail sellers of electricity and all IOUs to procure at  
            least 33% of electricity delivered to their retail customers  
            from renewable resources by 2020.  Chaptered by the Secretary  
            of State - Chapter 1, Statutes of 2011-12 First Extraordinary  
            Session.  


             AB 32 (Nunez) 2006:  Creates a statewide greenhouse gas  
            emission limit that would reduce emissions by 25% by 2020.   
            Chaptered by the Secretary of State - Chapter 488, Statutes of  
            2006.  


            SB 107 (Simitian) 2006:  Requires retail sellers of  
            electricity to procure at least 20% of their retail sales from  
            renewable power by 2010.  Chaptered by the Secretary of State  
            - Chapter 464, Statutes of 2006.  


            SB 1201 (Torlakson) 2004:  Authorizes BART to receive power  
            from a POU without discrimination or delay from any electrical  
            corporation.  Chaptered by the Secretary of State - Chapter  
            613, Statutes of 2004.


            SB 1078 (Sher) 2002:  Requires utilities to increase  
            procurement of electricity from renewable energy sources by at  
            least 1% per year.  Chaptered by the Secretary of State -  
            Chapter 516, Statutes of 2002.










                                                                     SB 502


                                                                    Page  8





            SB 184 (Kopp) 1995:  Authorizes BART to receive power from a  
            federal power marketing agency or its successor without  
            discrimination or delay from any electrical corporation.    
            Chaptered by the Secretary of State - Chapter 681, Statutes of  
            1995. 


          REGISTERED SUPPORT / OPPOSITION:




          Support


          San Francisco Bay Area Rapid Transit District (BART) (Sponsor)


          California Municipal Utilities Association


          California Transit Association


          Center for Sustainable Energy


          Clean Power Campaign


          Coalition for Clean Air 


          Environment California


          Environmental Defense Fund










                                                                     SB 502


                                                                    Page  9





          Large-scale Solar Association


          Natural Resources Defense Council


          Northern California Power Agency


          Recurrent Energy


          Sierra Club California


          Solar Energy Industries Association


          Union of Concerned Scientists 


          Vote Solar




          Opposition


          None on file.




          Analysis Prepared by:Edmond Cheung / U. & C. / (916)  
          319-2083











                                                                     SB 502


                                                                    Page  10